Final settlement
In one sentenceA settlement prepared when an employee's contract ends that brings together all entitlements (salary, leave pay and end-of-service benefit), subtracts what the employee owes, and is then signed by the employee on receipt.
Simply put
The final settlement is one sheet of what the employee is owed and owes on the last working day: the days of the last month, pay for the remaining leave, and the end-of-service benefit, minus remaining advances and other amounts.
Keep a signed copy, because it proves the relationship was closed and the entitlements were paid.
Worked example
A pharmacy employee's contract ended after 3 years in a case where he is entitled to the full benefit, and his total wage is 6,000 SAR.
Salary for 10 days of the last month: 10 × 2002,000
Pay for 12 remaining leave days: 12 × 2002,400
End-of-service benefit: 3 × 3,0009,000
Remaining advance balance(1,000)
Net final settlement12,400 SAR
Formula: Entitlements (salary + leave pay + benefit) − what the employee owes